China's offshore oil and gas producer CNOOC Ltd said Wednesday that its subsidiary CNOOC Luxembourg has entered an agreement to acquire oil sands developer OPTI Canada for approximately $2.1 billion.

The transaction is expected to be completed in the fourth quarter of this year, subject to government and regulatory approvals, CNOOC said in a statement.

OPTI owns a 35% stake in the Long Lake oil sands project, while operator Nexen holds the balance.

The Long Lake project includes a steam assisted gravity drainage operation and an upgrader.

According to CNOOC, the SAGD Operation is expected to have throughput rates of approximately 72,000 b/d of bitumen at full production and the upgrader is expected to produce approximately 58,500 b/d of sweet crude at full capacity.

Last week, OPTI and Nexen said that bitumen production at the end of June was at about 30,000 b/d and production is expected to reach the mid-30,000 b/d level by the year end.

The upgrader at the project during the second quarter processed 98% of the bitumen produced at the project, in addition to 9,200 b/d of externally sourced bitumen, OPTI said last week.

Premium sweet crude yields decreased from 74% during the first quarter to average 70% during the second quarter, the Canadian company said.

Source:chemnet.com